Earnings Preview: United Parcel Service

United Parcel Service (UPS) is expected to report Q3 earnings before market open Thursday Oct. 23 with a conference call scheduled for 8:30 am ET.

Guidance

Analysts are looking for EPS of 89c on revenue of $13B. The consensus range for EPS is 83c to 94c, while the consensus range for revenue is $12.47B to $13.3B, according to First Call.

Analyst Views

United Parcel Service gave guidance for FY08 EPS when it reported its Q2 earnings. The company expects FY08 EPS $3.50 to $3.70 vs. consensus of $3.57. The company's CEO stated on July 22, that assuming business conditions do not worsen, he expects the second half of 2008 to be "modestly better" than the first half.

Investors will be interested to see if this guidance remains true given the current economic down turn. United Parcel Service announces rate increases for 2009, including an average increase of 5.9% for ground packages and an average net increase of 4.9% on all air express and U.S. origin International shipments. The new rates will take effect on January 5, 2009.

United Parcel Service was downgraded to Hold from Buy by Stifel Nicolaus, on September 17. The firm downgraded the company based on valuation.

Comments

[Stone Fox C...:]

Lower fuel costs will be huge for their bottom line.

2008 Oct 22 05:46 PM